Once upon a time there was a small patch of London owned by German merchants. It was called the Steelyard and was a walled off area on the banks of the Thames near where Cannon Steet tube station is now. The group of Germans refused to allow Englishmen to enter its gates along with prostitutes, goldsmiths and barbers. You might think these were an odd bunch to exclude but it was not, surely, as odd as allowing a foreign power to establish ownership of this area at the heart of the City of London.

It was in fact the headquarters of a commercial monopoly called the Hanse. Established in 1157 the league persuaded the English king Henry II to exempt its merchants from paying tolls in London and to trade freely at the lucrative fairs then being established across England. Did the German merchants give reciprocal privileges to English merchants wishing to trade in Germany and the Baltic? No, they did not. To make their monopoly even stronger they obtained a charter from King Henry III confirming their rights.

How on earth did they do this? What posssessed the ruler of England to hobble his traders in this way? That’s what English merchants wanted to know but, as now, deals were done in secret and those people lower down the line only got to know about them when they were done deals and they were forced to comply.

Naturally a power struggle began between the Hanseatic League and the English merchants with parliament refusing to accept the charter of privileges granted to the Germans without the same terms being offered to English merchants. The Hanse merchants refused to compromise and although England was riven by its own internecine factions in the late fifteenth century war broke out and the Steelyard was attacked and destroyed by an angry mob of London traders.

Meanwhile the Norwegian guilds attacked the Hanse merchants who were trying to close down Norwegian trade in the Baltic by blockading their ports. Other countries also objected to this unfair monopoly and took steps to protect themselves. In England it was not until Elizabeth I over one hundred years later thought to protect her merchants by abolishing the Hanse in London that the Steelyard was finally closed down.

Why was Henry II so sot-witted that he did not see the sense of protecting his own people from this aggressive trading faction working within his own domain? We might well ask similar questions now as the City is again under attack from a German Stock Exchange monopoly which will eventually lead to the demise of our own stock exchange when the Germans will then no doubt do a ‘Cadbury’ on it.